Cidades Comunidades e Territórios 39 | 2019 Queering the city Housing policies, market and home ownership in Portugal Beyond the cultural model Teresa Costa Pinto and Isabel Guerra Electronic version URL: http://journals.openedition.org/cidades/1638 ISSN: 2182-3030 Publisher DINÂMIA’CET-IUL Electronic reference Teresa Costa Pinto and Isabel Guerra, « Housing policies, market and home ownership in Portugal », Cidades [Online], 39 | 2019, Online since 31 December 2019, connection on 10 January 2020. URL : http://journals.openedition.org/cidades/1638 This text was automatically generated on 10 January 2020. Cidades. Comunidades e Territórios is licensed under a Creative Commons Atribuição-Uso Não- Comercial-Proibição de realização de Obras Derivadas 4.0 International. Housing policies, market and home ownership in Portugal 1 Housing policies, market and home ownership in Portugal Beyond the cultural model Teresa Costa Pinto and Isabel Guerra Introduction 1 In previous articles (Pinto, 2017 ; Pinto and Guerra, 2013) on the dynamics of the Portuguese housing system, the specificity of the Portuguese case in the context of Southern European countries was pointed out, according to the literature on this subject, suggesting the formation of a cluster, characterized by an incipient welfare state, high rates of housing ownership, supported by a “welfare society”, and a residual sector of social housing (Allen et al, 2004). It was argued that the specificity of the Portuguese system was, on the one hand, a late but intense urbanization process, exerting strong constructive pressures on cities (especially since the 1960s), combined with an insufficient supply of housing, both private and public. On the other hand, a late and fragile development of a welfare state, in counter cycle, in the context of a general questioning of its sustainability. Moreover, public policy options within this embryonic welfare state were predominantly oriented towards sectors other than housing, namely health, social security and education (Santos et al, 2014). 2 In addition to the secondarization of housing policies within public policies, it should also be stressed that the vicissitudes of the democratic process and several periods of economic difficulty (IMF intervention in 1977, 1983 and 2011) granted an inconsequential character to public housing policies after 1974. Public housing promotion suffered strong fluctuations in this period, associated with social and political transformations of the country and the international economic environment. Despite the incipient and erratic public housing intervention, the most permanent housing policy was the support to home ownership in the private market, through subsidized credit and fiscal incentives, which ran since the mid-1980 until 2002. Thus, access to home ownership crosses the Portuguese society over the last decades, Cidades, 39 | 2019 Housing policies, market and home ownership in Portugal 2 gradually and consistently increasing the home ownership rate (in 2011, it reached 73 %, INE, 2011), which has become widespread in all social groups (Pinto, 2017 ; Pinto and Guerra, 2013). 3 The main objective of this article is to present a sociological reflection around the correlation between the specific nature of the Portuguese development model (and public housing policies) and the high rate of home ownership, based on research conducted by the authors, especially in the first decade of this century1.We argue that this feature of the Portuguese housing system represents a happy joint venture between Families, State and Market. For families, this form of access to housing seems to function not only as an attachment to property, part of a specific cultural model, as is usually a hallmark of Southern European countries, but also represents an economic rationale and a source of security, in a context of an unstable labour market, low income and weak social protection. 4 For a long time, this relation between home ownership, market and welfare State has been a recurring theme in academic research on housing. Researchers have wondered why Southern European countries, poorer and with a less developed welfare State, have the highest rates of home ownership. One of the best-known versions of this approach was developed by Jim Kemeny in his work on international comparisons, which suggests an inverse correlation between house ownership levels and welfare spending (Kemeny, 1981 ; 1992 ; 1995 ; 2001). This thesis, commented on, discussed and also controversial (see, namely, Blackwell and Kohl, 2019), is supported by several empirical cases that show how this relationship is complex and may be influenced by multiple factors, namely, the development level of these countries, the existence of alternative forms of construction (such as self-construction) and the ideological and cultural dimensions. However, data seems to show that in “developed countries of Southern and Eastern Europe and East Asia especially, the welfare mix between state, family and market has proved to be strongly influenced by very high owner-occupancy rate” (Ronald, 2012 : 12). 5 Thus, firstly, we intend to show how the specific characteristics of the urbanization model, namely the late migration from rural areas (1960s, 1970s and 1980s), occupying the central city and its suburbs – both in the legal market and in slums or illegal settlements based on the property system – has contributed to facilitating access to home ownership by families who would never have access to this property status, given their low income. Secondly, we highlight how, in a country in a late and rapid development and urbanization process, land ownership and real estate construction have become a powerful economic (and political) sector, reinforced by the rise of finance capital. It may be argued that the combination of this economic capital with housing policies based on support for home ownership, and families in a process of upward social mobility, formed the ideal joint venture to turn the home ownership regime into the basis of housing dynamics until the recent 2008 crisis. This type of access to housing matches a double inevitability, with the absence of a solid rental market and a pragmatic approach in terms of households’ savings investment options. The recent crisis has provided evidence thereof, especially due to declining family income and to credit retraction. Cidades, 39 | 2019 Housing policies, market and home ownership in Portugal 3 The specificity of housing production arrangements : the relevance of illegal and self-construction housing 6 In order to perceive the singularity of the Portuguese housing system, we need to understand the impacts of urban growth dynamics, metropolization processes and specific public intervention instruments, given the housing needs arising from a growing number of new urbanites coming from rural areas, or as a result of rising immigration. 7 Between the 1960s and 1974, there was an increase in industrialization which called for urban growth and, consequently, a stronger housing pressure. The combination of land and real estate interests attracted support from the financial system and the dominant economic groups to the construction sector and real estate companies, many of whom operating in both the legal and the informal market (see next section). Housing supply increased, but not enough to meet housing needs, and prices were not accessible to lower income groups. Thus, overcrowding of unhealthy housing, the occupation of courtyards (“ilhas”) and illegal construction were the solution to the serious housing deficit in the country, especially in the metropolitan areas of Lisbon and Oporto. During this period, large private collective housing neighbourhoods were built, which led to the urbanization of peripheral areas and the expansion of the city throughout its limits. (Pinto, 2017). 8 After the April’1974 revolution, industrialization accelerated the process of urbanization and rural exodus. In the absence of sufficient housing supply (private or public), families found several spontaneous responses to growing housing needs, such as the extension of precarious housing areas (slums) and illegal forms of self- construction of single-family homes on the outskirts of major cities, leading to the emergence of a significant number of “small urban owners”. The importance of individual construction, regardless of its legal status, without market interference also helps to explain the boost in home ownership. As depicted in Chart 1, even in more recent years, individuals were responsible for a large proportion of new housing, including construction within the legal market, through self-construction or direct administration. Cidades, 39 | 2019 Housing policies, market and home ownership in Portugal 4 Chart 1. Completed dwellings in new constructions for family housing by promoter, 2000-2012 ( %) Own elaboration, based on INE, Construction and housing statistics, 2000-2012. The relevance of the real estate sector : the “primitive accumulation of capital” 9 In the Portuguese model of development, real estate construction and its reinforcement through the general access to home ownership by Portuguese families has been one of the pillars of economic growth, even before the April revolution and until the end of the last decade of the 20th century. In fact, as previously mentioned, mobility from the countryside to the cities in the 1960s and 1970s, after the outbreak of industrial development, was faced with housing deficit, which opened